The Pound Sterling (GBP) has shown strong momentum recently, with the potential to rise further, but analysts at UOB Group believe that it may struggle to break above last year’s high of 1.3144. Quek Ser Leang and Lee Sue Ann from UOB Group FX provide their insights on the current situation.
Bulls on the Rise, Testing Key Resistance Level
24-Hour View: The GBP saw a significant increase in value yesterday, reaching its highest level since July of last year at 1.3090 (+0.43%). Despite being in overbought territory, the bullish momentum is expected to continue. However, breaking above the key resistance level of 1.3144 may prove challenging. A drop below 1.3030 could indicate a reversal in the current trend.
1-3 Weeks View: With GBP posting gains for the fifth consecutive day, closing at 1.30+0 (+0.43%), the potential for further upside is evident. The price action suggests that GBP could target and surpass the 1.3144 level, as long as it remains above the strong support at 1.2950. Looking ahead, a break above 1.3144 could pave the way for a move towards 1.3200.
Analysis and Implications for Investors
For investors and traders, the current outlook on GBP presents both opportunities and risks. The bullish trend in GBP could offer potential gains for those looking to capitalize on the currency’s strength. However, the resistance at 1.3144 serves as a critical level to watch, as a failure to break above it could signal a reversal in the trend.
It is essential for market participants to monitor the GBP’s price action closely, especially around the key levels mentioned by UOB Group analysts. By staying informed and making informed decisions based on technical analysis and market trends, investors can navigate the currency markets effectively and optimize their investment strategies.